prasad Nilugal
( GST Practitioner & Accounts )
(14801 Points)
Replied 05 December 2020
All the accounting entries in the books accounts were pass as per ,Accounting golden rules in double entry accounting system for each transactions and events so you have apply following rules . (Accounting basics )
1) Debit the receiver and Credit the giver .
2) Debit what comes in and credit what goes out .
3) Debit the expenses and losses and credit the gains & Income .
This is best way to practice , apply above rules whenever you are passing Accounting / journal entries .
Pranay Murkute
(13 Points)
Replied 05 December 2020
Waku39
(Sales man)
(61 Points)
Replied 05 December 2020
@ prasad nilugal ,
Thanks for the reply .
My teachers taught me the american or modern rules of accounting
Let me try to share my notes i prepared .
Accounting is the art of recording a companies items , amount and parties in a transaction or in an accounting event
It starts with Entries ,then moves to
Accounting Equation
Journal
Adjustment entries
Ledger
Trial balance
Profit and loss
Balance sheet
Cash flow statement
and
Fund flow statement
There are many categories of items that move in and out of a business
Create the records of of the Items of those category according to the rules of accounting , in my case the , american or modern rules of accounting .
Type of account Increase Decrease
There are items of assets ( cash ) Debit Credit
There are items of expense ( purchase ) Debit Credit
There are items of income ( sales ) Credit Debit
There are items of capital Credit Debit
There are items of liability Credit Debit
Debits and Credits
The term debit indicates the left side of an account, and credit indicates the right side. They are commonly abbreviated as Dr. for debit and Cr. for credit. They do not mean increase or decrease, as is commonly thought. We use the terms debit and credit repeatedly in the recording process to describe where entries are made in accounts. For example, the act of entering an amount on the left side of an account is called debiting the account. Making an entry on the right side is crediting the account
Adjustment entries ,
or
Adjustments on Accrual basis and closing in Accounting period
At the end of the year after preparing trial balance a list of unrecorded items is prepared which is called list of adjustment for which adjustment entries are passed. Now closing entries will be passed. The purpose of closing entries is to close all those accounts which comes in trading and profit & Loss and these accounts are mainly related to expenses , incomes and goods.
Common Adjustment entries ,
Outstanding expenses
Received in advamce
Prepaid expense
Unearned income
Accrued income
Accrued expense
The subject of accounting is based on one guiding principle; everything else consists of details, some of which are technical, and some of which are procedural. The guiding principle is simple:
All data concerning a company’s activity is assigned to one of the following five categories: 1.Expenditures , 2. Income , 3.Assets, 4.Liabilities, 5.Capital . The first two categories (1 and 2) are the backbone of a report called a profit and loss statement. The next two categories (3 and 4) are the backbone of a report called the balance sheet.
The fifth category (5) is the backbone of a report called the cash flow statement. When details are given below, it will be seen that each of these categories is a collection of smaller categories
Cash Flow
Cash flow is recorded on a company's cash flow statement. This statement—one of the main statements for a company—shows the inflow and outflow of actual cash (or cash-like assets) from its operational activities. It is a required report under generally accepted accounting principles (GAAP).
Fund Flow
On the accounting side, the fund flow statement was required by GAAP between 1971 and 1987.3 When it was required, the statement of fund flow was primarily used by accountants to report any change in a company's net working capital, or the difference between assets and liabilities, during a set period of time. Much of this information is now captured in the statement of cash flow.
:)
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